Is Your Packaging Cost Increasing?
December 1, 2006
As evident on the graph to the right, packaging costs have continued to rise as much as 40% over the past five years. What better time than now and who better than a key player in the industry to explain why?
The demand for reusable, returnable IBCs is stronger than ever and continues to grow despite the increases in raw materials. Prices and availability of stainless steel have been fluctuating for several months and continue to do so. This uncertainty in the market has required stainless steel suppliers to increase the surcharges applied to the price. For example, from mid 2003 when surcharges were $0.16 for 304 stainless steel materials, there has been a steady escalation, reaching $0.85 for 304 in August 2006.
Manufacturing industries in North America are presently facing widespread increases in the prices of all stainless steel materials and there are several factors that have contributed to the present situation in the market:
• The demand has increased substantially in the United States, Europe, China and Korea.
• At the end of 2001 Allegheny Ludlum closed a major stainless steel facility in Houston, Pennsylvania, eliminating approximately 250,000 tons of melt capacity. Some twelve months later, Allegheny Technologies, one of the largest and most diversified producers of specialty steel in the world, closed its plant in Massillon, Ohio, used for the production of stainless steel plate.
• The steel industries in the United States also face higher manufacturing costs, due in part to higher energy and transportation costs as well as the rising cost of healthcare for employees.
A Letter From Our President
As noted in the article above, the cost to purchase IBCs, whether constructed of stainless steel or polyethylene, has continued to increase drastically, especially this year. However, the price of an IBC isn’t the only increase we have seen this year. Gas prices hit all time highs over the summer months with never before seen $3.00 plus a gallon and mortgage rates also began to creep back up, catching many off guard.
As all this was happening around us, Precision was able to sit down with corporate presidents, key decision makers, purchasing managers and many small business owners to discuss fleet management options that would benefit their individual businesses. We were able to offer fleet management options tailored specifically to their needs.
The article above gives you an understanding of why the prices are increasing, but the graph to the right gives you even more valuable information. The rental rates of the ECOsafe stainless steel IBCs have remained relatively the same since the formation of Precision IBC over 10 years ago. While prices all around us continue to spiral out of control, isn’t it nice to know you can lock in your packaging costs for up to five years by choosing Precision IBCs rental program?
Precision IBC is extremely proud of this fact and we invite you to
call us today. One of our fleet management professionals can sit down
with you to evaluate your packaging costs. Of course there is no obligation.
We simply welcome the opportunity to show you how Precision can help
you cut expenses.
A
New Location
In our continued commitment to provide outstanding customer service, Precision
IBC is pleased to announce another stocking location. To better serve our customers
on the east coast, we are now stocking tanks in Carteret, New Jersey. Now we
can easily ship from any of the following locations, Fairhope, Alabama, Broussard,
Louisiana, Cleveland, Ohio, or Carteret, New Jersey to help cut down on the freight
costs incurred by our customers.
Precision
On Display
As 2006 comes to a close, we thought we would look back at the opportunities
we had to highlight our products, personnel, and capabilities over the last year.
We have a very diverse customer base when it comes to industries served so we
attend various trade shows throughout the year. We hope you enjoy the photos
below as much as we enjoyed seeing all of you!
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©2006 Precision IBC, All rights reserved.
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